Judge blocks Keystone XL pipeline over the lack of environmental reviews.
President’s agenda of ‘energy dominance’ slowed by decision to block pipeline
WASHINGTON — President Donald Trump’s campaign to establish U.S. “energy dominance” was struck a blow after a federal judge in Montana blocked the construction of the Keystone XL pipeline.
U.S. District Judge Brian Morris ruled late Thursday the Trump administration had failed to conduct necessary environmental reviews, putting into question a project that had galvanized the environmental movement and which President Donald Trump made a cornerstone of his presidential campaign.
Over almost two years in office, Trump has steadily rolled back one Obama-era policy after another in a push to expand oil and gas production, drawing crit-
icism from many inside and outside Washington that he was not moving carefully enough in a system designed to limit policy changes from one administration to the next. The administration’s decision on Keystone came four days after Trump took office.
“They wanted a quick reversal because that’s what Trump wanted,” said Victor Flatt, a law professor at the University of Houston. “But it doesn’t work when you don’t follow the law.”
In 2015, after nearly seven years of review, the Obama administration rejected Canadian developer TransCanada’s application to build an 1,100 mile pipeline from Alberta’s oil sands fields into the United States on the grounds it would increase greenhouse gas emissions and hurt U.S. leadership in climate change.
In his ruling, Morris said the Trump administration had failed to provide evidence showing the pipeline would not contribute climate change or that it presented an economic advanatge at a time U.S. oil production is booming through the shale drilling revolution.
Outside the White House Friday, Trump suggested the government would appeal Morris’ ruling in the
9th Circuit Court of Appeals in San Francisco.
“Everything ends up in the 9th Circuit,” he said, with Marine One idling in the background. “It was a political decision made by the judge. I think it’s a disgrace.”
TransCanada did not respond to a request for comment.
The decision comes as a blow to an oil sector that has found building new pipelines increasingly difficult amid steady flow of litigation from environmental groups.
Robin Rorick, a vice president at the American Petroleum Institute, said pipelines like Keystone “are the backbone of our nation’s energy infrastructure and one of the most environmentally sound ways to transport the fuel and petroleum products that power America every single day,” said .
The Trump administration now faces the prospect of waiting out the appellate process or redoing the environmental review for Keystone, processes that could both potentially take years.
“An appeal of this order will likely go to the 9th Circuit, which has not been favorable ground for the Trump administration,” Fred Jauss, a Washingtonbased attorney at Dorsey & Whitney, said in an email. “A lengthy appellate process could delay TransCanada’s goal of commencing
construction in 2019.”
In the meantime, it’s unclear whether the pipeline, which could deliver more than 800,000 barrels of crude a day to Texas refineries, still makes economic sense today.
TransCanada first filed the application for the $5.2 billion Keystone XL in 2008, when oil prices were over $100 a barrel. With West Texas Intermediate now trading at close to $60
a barrel, oil companies are already scaling back major capitol projects.
Crude settled at $60.19 a barrel Friday in New York.
TransCanada has yet to issue its final decision on building the last leg of the pipeline, which would run from Alberta to Steele City, Neb. A pipeline running from Nebraska to refineries on the Texas Gulf Coast has already been constructed.
For now, there remains enough demand for Canadian crude in the U.S. for the pipeline to ultimately go ahead, said Zachary Rogers, an energy analyst at Wood Mackenzie.
“While definitely a major setback in terms of timing, this is unlikely to be the nail in the coffin for Keystone XL,” he said.